Police allege Stanton twice punched the protest organiser, charging him with two counts of assault.

Stanton was granted bail but remained behind bars in Christchurch after filing a High Court appeal against two of the conditions - that he is to stay away from central Nelson and live in the suburb of Stoke.

In a judgement released on Thursday, Justice Joe Williams ordered the conditions to be removed, allowing Stanton to return to Nelson.

Justice Williams concluded Stanton had the right to free expression and banning him from the centre of town couldn't be justified in a "free and democratic Nelson".

However, he added: "those that opposed him also have that right, and the right of peaceful assembly".

Stanton's lawyer Steven Zindel told Newshub his client arrived back into Nelson on Friday and planned to return to his spot outside the Farmers department store on Saturday.

Footage of the November 20 protest appears to show a counter-protest - by those who support Stanton - throwing water balloons at the other group.

Those wanting Stanton gone argue his campsite blocks the footpath and interferes with nearby businesses.

Stanton is a polarising figure well known to the Nelson community after many years of protesting various issues, including a council trespass notice and the payment of fines worth more than $100,000.

The streets of central Nelson have been Stanton's home since the horse and cart he once slept on in the town were taken off him last year.